Crypto weekly update
24. March 2022  • clock 5 min •  Daniel Mitrovsky

EIP-1559 has burned 2 million Ethereum – Crypto weekly update

This week, the total market capitalization exceeded 1.78 trillion EUR. Increase at the 7-day interval is 8.53 %. Bitcoin increased by 3.65 % during the week to a current value of over 39,100 EUR. Bitcoin dominance is 41.7 %.

Source: Coinmarketcap

Ethereum continues to burn its supply

According to the available news, the second biggest and most popular cryptocurrency, Ethereum, has already burned a total of 2 million ethers since the introduction of the EIP-1559. Burned tokens are estimated to be worth up to $5.9 billion at the time of writing. Web portal, which is tracking various statistics associated with the burning ETH tokens in the Ethereum network, drew attention to crossing this significant milestone.

The EIP-1559 was implemented on the Ethereum network in August 2021 and it was one of the most popular and significant Ethereum updates so far. This update introduced a new mechanism that burns a portion of the gas fee with every Ethereum transaction. The EIP-1559 was designed to improve the fee structure of the Ethereum network, which previously adopted an auction system that made transaction costs unpredictable.

Burning leaderboard is led by Opensea, the world’s biggest NFT marketplace, which has ensured the burning of up to 230 000 ethers since the implementation of the above-mentioned improvement.

Per, Ethereum currently burns just over 6.07 ETH per minute, approximately 8740 ethers per day. The ETH supply currently inflates by about 4.5% annually, but the upcoming update called “The Merge”, which will ensure the network’s transition to the Proof-of-Stake algorithm, should reduce the issuance of new ETH to just 1 % annually. Source

Bitcoin activity is growing again

It looks like Bitcoin is waking up again. Number one in terms of market capitalization has gained nearly $5,000 in the past 10 days, bouncing back from a local minimum of $37,600 reached on March 14 to $43,000. Currently, Bitcoin consolidates in the price range from $41,500 to $43,000 and is preparing for another attempt to break significant resistance.

However, price movements are not the only argument for Bitcoin’s resurgence. The number of new addresses on the Bitcoin network has increased significantly over the past month, indicating an inflow of new investors into the market. Number of new Addresses is one of the most important metrics through which it is possible to track the activity and interest of investors in Bitcoin. More than 480,000 Bitcoin addresses were created in Mar. 17 alone, which is a strong positive signal for further upward price action.  

A similar uptrend can be seen in the futures markets, where the number of open positions and open interest, including both long and short positions, has been steadily rising since Mar. 7.

IntoTheBlock’s In/Out of the Money Around Price model reveals that 1.57 million addresses have previously purchased nearly 760,000 BTC between $40,900 and $42,100. A decisive weekly candlestick close above this hurdle could give Bitcoin the strength to break the next critical barrier, which is sitting at $45,000. Source

Terra plans to buy Bitcoins

Terraform Labs and decentralized platform Terra founder Do Kwon has outlined plans to accumulate a whopping $10 billion worth of Bitcoin to add to the project’s stablecoin reserves.

Terra is a decentralized blockchain infrastructure that uses stablecoins to create an alternative stable monetary system. Terra USD (UST) is the most popular stablecoin in the Terra network. It is an algorithmic stablecoin linked to the value of the US dollar, and its value and price stability are partially maintained via the mechanism of issuing and burning the network´s native token called LUNA.

However, Kwon has not divulged further details related to these plans. Kwon also bullishly emphasized that its stablecoin TerraUSD backed by over $10 billion in BTC reserves will “open a new monetary era of the Bitcoin standard.” 

Kwon also said in a discussion with users on Twitter that the funds will be used to backstop short-term UST redemptions and for a decentralized forex reserve. Source

Hoskinson expects huge performance for Cardano

Charles Hoskinson, co-founder and CEO of IO Global (formerly known as “IOHK”), the company responsible for Cardano’s research and development, explained in an interview with Marc Monty Montemagno of InsideW3B why June and October will be one of the best months for the Cardano.

“This year all these updates are coming that are massively improving the scalability and expressiveness of the system so that you’ll get the same type of performance you’re seeing from systems like Solana and so forth. Or at least in the same orders of magnitude… Not only do you get all the security, the correctness, the resilience and a great three-million person community, but you also get the best of what competitors are bringing to bear.“

In this statement, Hoskinson indirectly referred to the ongoing work on the Basho development phase, which is aimed at improving the scalability of the network. High scalability and low transaction fees are currently the number one priority for Cardano.

“June and October are going to be great months for us because those are the months where we’re turning a lot of new features on, including the improvement of the Cardano scripting language called Plutus or innovations related to side chains,” Hoskinson added.

The price of cardano has slumped by more than 70 % since its ATH and Cardano moved from third place almost to the tail of the TOP 10 cryptocurrencies ranked by market capitalization. These news can be a new impulse for buying Cardano, which is available in our Fumbi Custom. Source

El Salvador postpones bitcoin bond

El Salvador’s finance minister, Alejandro Zelaya, announced today that the Central American country has postponed issuing its much anticipated Bitcoin-backed bond as it waits for market conditions to improve.

The government originally planned to issue $1 billion in bonds to investors between March 15 and March 20. The government intends to convert $500 million into Bitcoin and to use the other $500 million for infrastructure and Bitcoin mining.

The bond maturity is likely to be five years, with bondholders receiving dividends as El Salvador liquidates the BTC.

Zelaya says current market volatility and the war between Russia and Ukraine have prompted authorities to postpone the launch date, possibly until September. “Now is not the time to issue the bond,” Zelaya said. He’s still expressing hope for a release during the first half of the year. Source

Grayscale expands fund offering

The largest crypto asset manager, Grayscale, is expanding its cryptocurrency-focused investment fund offering with a new fund aimed at alternative smart contracts platform.

The fund, called The Grayscale Smart Contract Platform ex Ethereum, will allow investors to invest in the largest smart contract platforms. However, this fund does not include Ethereum, the world’s largest smart contract platform.

The fund is composed of the altcoins Cardano, Solana, Avalanche, Polkadot, Polygon, Algorand, and Stellar. The fund will provide exposure to seven smart contract platforms at the following weightings:

  • Cardano: 24.63 %
  • Solana: 24.27 %
  • Avalanche: 16.96 %
  • Polkadot: 16.16 %
  • Polygon: 9.65 %
  • Algorand: 4.27 %
  • Stellar: 4.06 %

Grayscale CEO Michael Sonnenshein said the fund was created because he believes investors want “diversified exposure” across the cryptocurrency market. Source

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